[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 928 Introduced in House (IH)]






109th CONGRESS
  1st Session
                                H. R. 928

 To amend the Electronic Fund Transfer Act to extend certain consumer 
protections to international remittance transfers of funds originating 
             in the United States, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 17, 2005

 Mr. Gutierrez (for himself, Mr. Frank of Massachusetts, Mrs. Maloney, 
    Mr. Hinojosa, Mr. Meeks of New York, Ms. Solis, Ms. Waters, Mr. 
    Crowley, Mr. Al Green of Texas, Ms. Lee, Mr. Ackerman, and Ms. 
Wasserman Schultz) introduced the following bill; which was referred to 
 the Committee on Financial Services, and in addition to the Committee 
on International Relations, for a period to be subsequently determined 
 by the Speaker, in each case for consideration of such provisions as 
        fall within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
 To amend the Electronic Fund Transfer Act to extend certain consumer 
protections to international remittance transfers of funds originating 
             in the United States, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``International Remittance Consumer 
Protection Act of 2005'' .

SEC. 2. FINDINGS.

    The Congress finds as follows:
            (1) In 2003, worker remittances from the United States to 
        Latin America reached $31,000,000,000 and that volume is 
        expected to rise as the region is both the fastest growing 
        remittance market in the world and has the highest volume of 
        remittances in the world.
            (2) Of the $31,000,000,000 in remittances to Latin America, 
        $14,000,000,000 went to Mexico: an amount exceeding the 
        country's total revenues from tourism, and representing more 
        than \2/3\ of the value of petroleum exports and roughly 180 
        percent of the amount of agricultural exports.
            (3) Remittances account for at least 10 percent of the 
        gross domestic product of 6 countries in Latin America: Haiti, 
        Nicaragua, El Salvador, Jamaica, the Dominican Republic, and 
        Guyana.
            (4) The Declaration of Nuevo Leon from the January 2004 
        Special Summit of the Americas recognized that ``. . . 
        remittances are an important source of capital in many 
        countries of the Hemisphere . . .''.
            (5) The Declaration of Nuevo Leon also committed the 
        countries of the Americas to ``. . . take concrete actions to 
        promote the establishment, as soon as possible, of necessary 
        conditions, in order to achieve the goal of reducing by at 
        least half the regional average cost of these transfers no 
        later than 2008''.
            (6) Studies have shown that that, on average, around 10 
        percent of remittances received are saved or invested by the 
        recipients which supports 2 conclusions: That some percentage 
        of recipients are therefore in a position to use remittance 
        money to create new businesses and that financial institutions 
        can also use remittances as the basis of credit for 
        entrepreneurs starting small or micro-enterprises.
            (7) Since affordable, long-term mortgages are not widely 
        available in many countries of the Western Hemisphere, 
        financial institutions can increase the number of mortgages 
        they provide to poor people in the region by using remittances 
        as the basis for credit.
            (8) The Multilateral Investment Fund of the Inter-American 
        Development Bank estimates that in February of 2004, the 
        average cost in the United States of sending a remittance to a 
        Latin American country was roughly 8 percent of the amount 
        remitted.
            (9) The Multilateral Investment Fund also estimates that 
        roughly 61 percent of adult foreign-born Hispanic persons 
        living in the United States, about 10,000,000 people, send 
        remittances to their countries of origin in Latin America and 
        that the amount of the average remittance to Latin America 
        ranges between $200 and $300.
            (10) The Multilateral Investment Fund estimates that the 
        States of California, New York, Texas, Florida, Illinois, and 
        New Jersey each remit more than $1,000,000,000 annually to 
        Latin America, and will account for $21,700,000,000, or roughly 
        70 percent of the $31,000,000,000 in remittances going to Latin 
        America in 2004.
            (11) Recent surveys show that nearly 80 percent of 
        individuals sending remittances use international money 
        transfer companies, and fewer than 10 percent use banks and 
        credit unions.
            (12) Roughly \1/2\ of Latin American immigrants in the 
        United States hold bank accounts, and only 10 percent of the 
        recipients in Latin America of remittances from the United 
        States hold bank accounts.
            (13) Individuals and families without access to the banking 
        system, in the United States and elsewhere in the Americas, pay 
        higher fees, have difficulty conducting financial transactions, 
        and lack the ability to establish credit records or obtain 
        other benefits from financial institutions.
            (14) The Federal banking agencies (as defined in section 3 
        of the Federal Deposit Insurance Act) recently agreed to notify 
        financial institutions that the remittances services they offer 
        to consumers can receive consideration in any evaluation under 
        the Community Reinvestment Act of 1977 as both a retail 
        service, and as a community development service if remittances 
        serve to increase access to financial services by low- and 
        moderate-income individuals.
            (15) The Federal banking agencies also agreed that current 
        regulations under the Community Reinvestment Act of 1977 
        provide for a distinction between the mere provision of 
        remittances services by a financial institution and the 
        ``responsiveness'' of such services to the financial services 
        needs of low- and moderate-income individuals--thereby allowing 
        for the consideration of lower cost remittances services in an 
        evaluation under such Act.
            (16) The increased participation of regulated financial 
        institutions, such as banks, savings associations, and credit 
        unions, holds the potential for reducing the costs of 
        remittances while at the same time offering the opportunity to 
        ``bank the unbanked'' in Latin American immigrant communities 
        in the United States.

SEC. 3. TREATMENT OF REMITTANCE TRANSFERS.

    (a) In General.--The Electronic Fund Transfer Act (15 U.S.C. 1693 
et seq.) is amended--
            (1) in section 902(b), by inserting ``and remittance'' 
        after ``electronic fund'';
            (2) by redesignating sections 918, 919, 920, and 921 as 
        sections 919, 920, 921, and 922, respectively; and
            (3) by inserting after section 917 the following:

``SEC. 918. REMITTANCE TRANSFERS.

    ``(a) Disclosures Required for Remittance Transfers.--
            ``(1) In general.--Each remittance transfer provider shall 
        make disclosures to consumers, as specified by this section and 
        augmented by regulation of the Board.
            ``(2) Specific disclosures.--In addition to any other 
        disclosures applicable under this title, a remittance transfer 
        provider shall clearly and conspicuously disclose, in writing 
        and in a form that the consumer may keep, to each consumer 
        requesting a remittance transfer--
                    ``(A) at the time at which the consumer makes the 
                request, and prior to the consumer making any payment 
                in connection with the transfer--
                            ``(i) the total amount of currency that 
                        will be required to be tendered by the consumer 
                        in connection with the remittance transfer;
                            ``(ii) the amount of currency that will be 
                        sent to the designated recipient of the 
                        remittance transfer, using the values of the 
                        currency into which the funds will be 
                        exchanged;
                            ``(iii) the total remittance transfer cost, 
                        identified as the `Total Cost'; and
                            ``(iv) an itemization of the charges 
                        included in clause (iii), as determined 
                        necessary by the Board; and
                    ``(B) at the time at which the consumer makes 
                payment in connection with the remittance transfer, if 
                any--
                            ``(i) a receipt showing--
                                    ``(I) the information described in 
                                subparagraph (A);
                                    ``(II) the promised date of 
                                delivery;
                                    ``(III) the name and telephone 
                                number or address of the designated 
                                recipient; and
                            ``(ii) a notice containing--
                                    ``(I) information about the rights 
                                of the consumer under this section to 
                                resolve errors; and
                                    ``(II) appropriate contact 
                                information for the remittance transfer 
                                provider and its State licensing 
                                authority and Federal or State 
                                regulator, as applicable.
            ``(3) Exemption authority.--The Board may, by rule, and 
        subject to subsection (d)(3), permit a remittance transfer 
        provider--
                    ``(A) to satisfy the requirements of paragraph 
                (2)(A) orally if the transaction is conducted entirely 
                by telephone;
                    ``(B) to satisfy the requirements of paragraph 
                (2)(B) by mailing the documents required under such 
                paragraph to the consumer not later than 1 business day 
                after the date on which the transaction is conducted, 
                if the transaction is conducted entirely by telephone; 
                and
                    ``(C) to satisfy the requirements of subparagraphs 
                (A) and (B) of paragraph (2) with 1 written disclosure, 
                but only to the extent that the information provided in 
                accordance with paragraph (2)(A) is accurate at the 
                time at which payment is made in connection with the 
                subject remittance transfer.
    ``(b) Foreign Language Disclosures.--The disclosures required under 
this section shall be made in English and in the same languages 
principally used by the remittance transfer provider, or any of its 
agents, to advertise, solicit, or market, either orally or in writing, 
at that office, if other than English.
    ``(c) Remittance Transfer Errors.--
            ``(1) Error resolution.--
                    ``(A) In general.--If a remittance transfer 
                provider receives oral or written notice from the 
                consumer within 365 days of the promised date of 
                delivery that an error occurred with respect to a 
                remittance transfer, including that the full amount of 
                the funds to be remitted was not made available to the 
                designated recipient in the foreign country, the 
                remittance transfer provider shall resolve the error 
                pursuant to this subsection.
                    ``(B) Remedies.--Not later than 90 days after the 
                date of receipt of a notice from the consumer pursuant 
                to subparagraph (A), the remittance transfer provider 
                shall, as applicable to the error and as designated by 
                the consumer--
                            ``(i) refund to the consumer the total 
                        amount of funds tendered by the consumer in 
                        connection with the remittance transfer which 
                        was not properly transmitted;
                            ``(ii) make available to the designated 
                        recipient, without additional cost to the 
                        designated recipient or to the consumer, the 
                        amount appropriate to resolve the error;
                            ``(iii) provide such other remedy, as 
                        determined appropriate by rule of the Board for 
                        the protection of consumers; or
                            ``(iv) demonstrate to the consumer that 
                        there was no error.
            ``(2) Regulations.--The Board shall establish, by 
        regulation, clear and appropriate standards for remittance 
        transfer providers with respect to error resolution relating to 
        remittance transfers, to protect consumers from such errors.
    ``(d) Applicability of Other Provisions of Law.--
            ``(1) Applicability of title 18 and title 31 provisions.--A 
        remittance transfer provider may only provide remittance 
        transfers if such provider is in compliance with the 
        requirements of section 5330 of title 31, United States Code, 
        and section 1960 of title 18, United States Code, as 
        applicable.
            ``(2) Applicability of this title.--
                    ``(A) Exclusions for certain remittances.--A 
                remittance transfer that is not an electronic fund 
                transfer, as defined in section 903, shall not be 
                subject to any of sections 905 through 913.
                    ``(B) Full applicability for certain remittances.--
                A remittance transfer that is an electronic fund 
                transfer, as defined in section 903, shall be subject 
                to all provisions of this title that are otherwise 
                applicable to electronic fund transfers under this 
                title.
            ``(3) Rule of construction.--Nothing in this section shall 
        be construed--
                    ``(A) to affect the application to any transaction, 
                to any remittance provider, or to any other person of 
                any of the provisions of subchapter II of chapter 53 of 
                title 31, United States Code, section 21 of the Federal 
                Deposit Insurance Act, or chapter 2 of title I of 
                Public Law 91-508, or any regulations promulgated 
                thereunder; or
                    ``(B) to cause any fund transfer that would not 
                otherwise be treated as such under paragraph (2) to be 
                treated as an electronic fund transfer, or as otherwise 
                subject to this title, for the purposes of any of the 
                provisions referred to in subparagraph (A) or any 
                regulation prescribed under such subparagraph.
    ``(e) Publication of Exchange Rates.--The Secretary of the Treasury 
shall make available to the public in electronic form, not later than 
noon on each business day, the dollar exchange rate for all foreign 
currencies, using any methodology that the Secretary determines 
appropriate, which may include the methodology used pursuant to section 
613(b) of the Foreign Assistance Act of 1961.
    ``(f) Agents and Subsidiaries.--A remittance transfer provider 
shall be liable for any violation of this section by any agent or 
subsidiary of that remittance transfer provider.
    ``(g) Definitions.--For purposes of this section, the following 
definitions shall apply:
            ``(1) Exchange rate fee.--The term `exchange rate fee' 
        means the difference between the total dollar amount 
        transferred, valued at the exchange rate offered by the 
        remittance transfer provider, and the total dollar amount 
        transferred, valued at the exchange rate posted by the 
        Secretary of the Treasury in accordance with subsection (e) on 
        the business day prior to the initiation of the subject 
        remittance transfer.
            ``(2) Remittance transfer.--The term `remittance transfer' 
        means the electronic (as defined in section 106(2) of the 
        Electronic Signatures in Global and National Commerce Act) 
        transfer of funds at the request of a consumer located in any 
        State to a person in another country that is initiated by a 
        remittance transfer provider, whether or not the consumer is an 
        account holder of the remittance transfer provider or whether 
        or not the remittance transfer is also an electronic fund 
        transfer, as defined in section 903.
            ``(3) Remittance transfer provider.--The term `remittance 
        transfer provider' means any person or financial institution 
        that provides remittance transfers on behalf of consumers in 
        the normal course of its business, whether or not the consumer 
        is an account holder of that person or financial institution.
            ``(4) State.--Notwithstanding the definition contained in 
        section 903, the term `State' means any of the several States, 
        the Commonwealth of Puerto Rico, the District of Columbia, and 
        any territory or possession of the United States.
            ``(5) Total remittance transfer cost.--The term `total 
        remittance transfer cost' means the total cost of a remittance 
        transfer expressed in dollars, including all fees charged by 
        the remittance transfer provider, including the exchange rate 
        fee.''.
    (b) Effect on State Laws.--Section 919 of the Electronic Fund 
Transfer Act (12 U.S.C. 1693q) is amended--
            (1) in the 1st sentence, by inserting ``or remittance 
        transfers (as defined in section 918)'' after ``transfers''; 
        and
            (2) in the 2nd sentence, by inserting ``, or remittance 
        transfer providers (as defined in section 918), in the case of 
        remittance transfers,'' after ``financial institutions''.

SEC. 4. FEDERAL CREDIT UNION ACT AMENDMENT.

    Paragraph (12) of section 107 of the Federal Credit Union Act (12 
U.S.C. 1757(12)) is amended to read as follows:
            ``(12) in accordance with regulations prescribed by the 
        Board--
                    ``(A) to provide remittance transfers, as defined 
                in section 918(h) of the Electronic Fund Transfer Act, 
                to persons in the field of membership; and
                    ``(B) to cash checks and money orders for persons 
                in the field of membership for a fee;''.

SEC. 5. AUTOMATED CLEARINGHOUSE SYSTEM.

    (a) Expansion of System.--The Board of Governors of the Federal 
Reserve System shall work with the Federal reserve banks to expand the 
use of the automated clearinghouse system for remittance transfers to 
foreign countries, with a focus on countries that receive significant 
remittance transfers from the United States, based on--
            (1) the number, volume, and sizes of such transfers;
            (2) the significance of the volume of such transfers, 
        relative to the external financial flows of the receiving 
        country; and
            (3) the feasibility of such an expansion.
    (b) Report to Congress.--Before the end of the 180-day period 
beginning on the date of the enactment of this Act, and on April 30 
biannually thereafter, the Board of Governors of the Federal Reserve 
System shall submit a report to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives on the status of the automated 
clearinghouse system and its progress in complying with the 
requirements of this section.

SEC. 6. EXPANSION OF FINANCIAL INSTITUTION PROVISION OF REMITTANCE 
              TRANSFERS.

    (a) Provision of Guidelines to Institutions.--Each of the Federal 
banking agencies (as defined in section 3 of the Federal Deposit 
Insurance Act) and the National Credit Union Administration shall 
provide guidelines to financial institutions under the jurisdiction of 
the agency regarding--
            (1) the offering of low-cost remittance transfers and no-
        cost or low-cost basic consumer accounts;
            (2) the availability of agency services to remittance 
        transfer providers; and
            (3) specific options for financial institutions to use to 
        take advantage of automated clearing systems, including the 
        FedACH International Services offered by the Board of Governors 
        of the Federal Reserve System and the Federal reserve banks, to 
        transmit remittances at low cost.
    (b) Content of Guidelines.--Guidelines provided to financial 
institutions under this section shall include--
            (1) information as to the methods of providing remittance 
        transfer services;
            (2) the potential economic opportunities in providing low-
        cost remittance transfers; and
            (3) the potential value to financial institutions of 
        broadening their financial bases to include persons that use 
        remittance transfers.
    (c) Assistance to Financial Literacy Commission.--The Secretary of 
the Treasury and each agency referred to in subsection (a) shall, as 
part of their duties as members of the Financial Literacy and Education 
Commission, assist that Commission in improving the financial literacy 
and education of consumers who send remittances.
    (d) Multimedia Campaign.--The Secretary of the Treasury shall, as 
part of the national public service multimedia campaign established 
under section 518(a) of the Fair and Accurate Credit Transactions Act 
of 2003, undertake a multilingual multimedia campaign to inform 
populations that are remittance users of the low-cost options for 
remittance transfers available to them, such as services provided by 
depository institutions and credit unions.

SEC. 7. AID ASSISTANCE TO INCREASE CAPITAL AND LOWER REMITTANCE 
              TRANSFER COSTS.

    (a) In General.--Part I of the Foreign Assistance Act of 1961 (22 
U.S.C. 2151 et seq.) is amended by adding at the end the following:

   ``CHAPTER 13--SOCIAL INVESTMENT AND ECONOMIC DEVELOPMENT FOR THE 
                                AMERICAS

``SEC. 499H. FACILITATING FLOWS OF PERSONAL REMITTANCES.

    ``(a) In General.--The President, acting through the Administrator 
of the United States Agency for International Development, shall 
provide assistance to leverage personal remittances and reduce the cost 
of remittances sent to Latin America and the Caribbean by--
            ``(1) increasing access to financial institutions for the 
        poor and working with local financial institutions to reduce 
        fees and other costs associated with sending or receiving 
        remittances;
            ``(2) working with local financial institutions to develop 
        programs whereby personal remittances could be used as the 
        basis of credit for mortgages and loans for small business, 
        microenterprises, housing, and other enterprises; and
            ``(3) providing matching funds for United States' private 
        entities that send remittances for development projects in 
        Latin America and the Caribbean.
    ``(b) Implementation.--The United States Agency for International 
Development shall follow the best practices of the Inter-American 
Development Bank and other appropriate organizations when designing and 
implementing programs that leverage personal remittances and reduce the 
cost of remittances sent to Latin America and the Caribbean.''.
    (b) GAO Study Regarding the Effectiveness and Success of Pilot 
Projects Implemented by the United States Agency for International 
Development.--
            (1) Study.--The Comptroller General of the United States 
        shall conduct a study on the effectiveness and success of the 
        pilot projects that have been implemented by the United States 
        Agency for International Development's missions in Mexico, El 
        Salvador, and Jamaica, and through the United States Agency for 
        International Development's Global Development Alliance.
            (2) Report.--Before the end of the 1-year period beginning 
        on the date of the enactment of this Act, the Comptroller 
        General shall submit a report to the Congress on the findings 
        and conclusions resulting from the study conducted under 
        paragraph (1), together with such recommendations for 
        legislative or administrative action as the Comptroller General 
        may determine to be appropriate.

SEC. 8. INTER-AMERICAN DEVELOPMENT BANK ASSISTANCE TO FACILITATE FLOWS 
              OF PERSONAL REMITTANCES.

    The Inter-American Development Bank Act (22 U.S.C. 283--283z-10) is 
amended by adding at the end the following new section:

``SEC. 39. FACILITATING FLOWS OF PERSONAL REMITTANCES.

    ``The Secretary of the Treasury shall instruct the United States 
Executive Director at the Bank to use the voice, vote, and influence of 
the United States to urge the Bank to provide assistance to--
            ``(1) increasing access to financial institutions for the 
        poor and working with local financial institutions to reduce 
        fees and other costs associated with sending or receiving 
        remittances;
            ``(2) working with local financial institutions to develop 
        programs whereby personal remittances could be used as the 
        basis of credit for mortgages and loans for small business, 
        microenterprises, housing, and other enterprises; and
            ``(3) providing matching funds for United States' private 
        entities that send remittances for development projects in 
        Latin America and the Caribbean.''.

SEC. 9. STUDY AND REPORT ON REMITTANCES.

    (a) Study.--The Comptroller General of the United States shall 
conduct a study and analysis of the remittance transfer system, 
including an analysis of its impact on consumers.
    (b) Areas of Consideration.--The study conducted under this section 
shall include, to the extent that information is available--
            (1) an estimate of the total amount, in dollars, 
        transmitted from individuals in the United States to other 
        countries, including per country data, historical data, and any 
        available projections concerning future remittance levels;
            (2) a comparison of the amount of remittance funds, in 
        total and per country, to the amount of foreign trade, 
        bilateral assistance, and multi-development bank programs 
        involving each of the subject countries;
            (3) an analysis of the methods used to remit the funds, 
        with estimates of the amounts remitted through each method and 
        descriptive statistics for each method, such as market share, 
        median transaction size, and cost per transaction, including 
        through--
                    (A) depository institutions;
                    (B) postal money orders and other money orders;
                    (C) automatic teller machines;
                    (D) wire transfer services; and
                    (E) personal delivery services;
            (4) an analysis of advantages and disadvantages of each 
        remitting method listed in subparagraphs (A) through (E) of 
        paragraph (3);
            (5) an analysis of the types and specificity of disclosures 
        made by various types of remittance transaction providers to 
        consumers who send remittances; and
            (6) if reliable data are unavailable, recommendations 
        concerning options for the Congress to consider to improve the 
        state of information on remittances from the United States.
    (c) Report to Congress.--Before the end of the 1-year period 
beginning on the date of the enactment of this Act, the Comptroller 
General shall submit a report to the Committee on Banking, Housing, and 
Urban Affairs of the Senate and the Committee on Financial Services of 
the House of Representatives on the results of the study conducted 
under this section.
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